May 10, 2013 / 12:33 PM / in 5 years

Magna and Bombardier drive TSX higher

TORONTO (Reuters) - Canada’s main stock index pushed higher on Friday as strong energy issues and surging shares of manufacturers Magna International (MG.TO) and Bombardier Inc (BBDb.TO) helped extend the index’s three-week run of gains.

A Toronto Stock Exchange (TSX) logo is seen in Toronto November 9, 2007. REUTERS/Mark Blinch

Auto parts maker Magna provided the index with its biggest single boost, jumping 3.6 percent to C$65.46 after reporting a higher-than-expected rise in first-quarter profit.

Also rallying was plane and train manufacturer Bombardier, which gained 5.1 percent to C$4.71 a day after the company reported a 25 percent jump in quarterly revenue and said its CSeries jetliner was on track to make its first flight in June.

All told, the Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE rose 45.19 points, or 0.36 percent, to 12,589.09, continuing a three-week run of gains driven by signs of a U.S. economic rebound that should at some point spill into Canada.

“Investors are looking more at risk appetite coming back, and for evidence you just have to look at what’s happening south of the border,” said Elvis Picardo, strategist and vice president of research at Global Securities in Vancouver.

Both the S&P 500 .SPX and Dow Jones Industrial Index .DJI notched record high closes on Friday, helped by the combination of accommodative monetary policy and recent steady economic data.

“I think the feeling is that that’s possibly going to pull the TSX along for a little bit,” Picardo added.

Eight of the 10 TSX subgroups rose, with Magna leading a 1 percent rise in consumer discretionary stocks.

The heavily weighted energy group rose 0.4 percent despite a drop in oil and natural gas prices. In the group, Encana Corp ECA.TO climbed 2.8 percent to C$19.32, while Precision Drilling (PD.TO) gained 1.5 percent to C$8.34.

Data showing that in April the Canadian economy recovered some of the jobs lost in a big employment drop in March, appeared to have little impact on trading.

Among individual stocks, Chorus Aviation Inc CHRb.TO sank 21 percent to C$2.89, making it the weakest performer on the index, after the contract carrier cut its dividend in half amid an ongoing cost dispute with Air Canada.

The recent strength of the TSX has been at odds with typical seasonal weakness around this time, but Picardo said the index could continue to push higher if U.S. markets do the same.

“I think there have been so many people who have been bracing themselves for a pullback, that the longer it doesn’t happen the more people jump back into the markets,” he said.

Reporting By Cameron French; Editing by Peter Galloway

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